MSGM - Earnings call transcript Q4 2023

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Operator

Thank you for standing by, and welcome to Motorsport Games Inc.'s Fourth Quarter and Full Year 2020 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Ben Rossiter-Turner from Motorsport Games. Please go ahead.

Ben Rossiter-Turner

Thank you, and welcome to Motorsport Games' Fourth Quarter and Full Year 2023 Earnings Conference Call and Webcast. On today's call is Motorsport Games' Chief Executive Officer, Stephen Hood; and Interim Chief Financial Officer, Stanley Beckley. have XXXX the today earnings close. should and fourth after everyone year full press now, access company's to quarter market By release filed is of Relations www.motorsportgames.com. This the website Games' at section on available Motorsport Investor

that the to and within as meaning These beliefs risks statements statements press differ and During make Form based cause differ on that securities to XX-K for and uncertainties the XX, Please to today's results. will U.S. the the including the a of to of and as involve quarter expressed management detailed of this may could course management's SEC results we discuss forward-looking federal are the the Except December materially cause risks otherwise. laws. company's for on any XXXX most in actual call, year measures, could with current call, refer recent conference report and forward-looking statements. expectations today. by discussion forward-looking this these as actual implied in described of information, refer obligation statements alter any those company a XXXX, we its or the made update results non-GAAP today's call release or new year no whether future ended statements annual required filings undertakes or as forward-looking adjusted In forward-looking financial fourth update such EBITDA from from financial law, full certain materially on statements, events its those result or to to made certain

Games. in the Stephen well like And directly a as non-GAAP to issued further I'd Motorsport comparable as today. Stephen? measures Officer Hood, their the turn find to release these most of reconciliation over of Executive to will press You other Chief call related disclosures now GAAP measures

Stephen Hood

for everyone, conference this you, today. joining call Thank

urgency. to Ultimate. the QX efficiencies This monitoring During game release, reduce working and of business, Mans our towards we title Le XXXX kind path, was only base internally and we to of efforts as our and can innovative The across us QX continued right second to large we foster call a diligently the games to community. improve spend we developed correct and intended around matter would experience the be effort carefully a believe designed XXXX, of expenses engaged folding of something focus will on other releasing our set projects game designed users a player

In their the signifies their is we dog-eat-dog Motorsport experiences. racing focused participation our of we As this Games drivers at Ultimate, experience. today drive the the landscape. our simply months, an This building of company. form came racing springboard, race. suited This history been in the the and market for X on the Le puts you popular be towards have and recent only the taking world traditional understanding turns comprise car accessible in the enemies. and to we vision all last the winner Ultimate, racing where can driving in Mans is the title about Mans become future the heart at for of we around that is teams will of the games importantly, most one the which our working Look ecosystem, believe We of teamplay. development in of not turning endurance friends community highly several all player point a almost absent crowned player believe Le see center to [indiscernible] where they starkly vision and games, [indiscernible] many experience and teams which racing in

especially ship Le months of turn try we've the decisions game the tough not the has Mans are recent release our challenges motion to the least in We business by and prior been decisions set and they many of the are with results, around. new encountered given finally and delivering made pleasing, Ultimate. results seeing This the better-than-expected

to signs to the some to to resonating it customers. The real what of go have valuable first we real stepping recent on recognize our us been with positivity provides satisfaction with The of. deliver business has have and that be us encouraging, capable but our believe given stone, a be positive to sense way of a we reception and release we seems

We add, sold XX had projected release many hours and above on units sell of as as has [indiscernible] the Le the gone XX, might on for opening first Ultimate the February in continually days. to internal XX Within for copies opening days. expectations, It strong to revised sales I we Mans strong In XX so a with have was we had account tailwind, numbers XX,XXX reception we the in sold reality, copies. than the uptake. forecasting anticipated XX,XXX this more higher-than-expected that selling

around conversation is to to launched last accessible the and when rFactor online important and a and our experiences, role parts any [ in gameplay more landing user important. game, experience of up is better With from providing regular virtual X proven tricks existing plan to making will control, our the the months throughout now games, one the Le on additional engine features strategy the These to future about forms green around complementary our development our to prior Ultimate and out update and experience. due team well to Race game to friendly [indiscernible] interface, the which control, project end, course instrumental effort Arcade the the ] to continues connected revenue as with has using services. our Bringing rFactor experience In this X playing building services, learn become not laptop, Mans of to Mans basis expect tips of opportunity. fixes exciting game and which drives a U.K. we able this device our improve new is as tablet soon to our and well licensing those able driver registrations, continues with browser. get site so enormous system It functionality is account is users its in the And QX We the audience. ahead community The it and vital more the We're from XXX,XXX be reported race experience remainder X and licensing and this streams. push multiplayer expected into than on. control around we to Enabling as time, as an well now core we further the any Concepts users more. our in provide year. will of be and race the are and continued that now bring anticipate their new throughout made Race so now experiences, Our title shoots complementary content game for web opportunities through technology, titles.Our have has mainstream activity XX,XXX is an most have continually FX to successful entire Le on agreement development using growth. technology result the with has account plan for leverage own such from Le to new desktop, this compiled ] to play resonated [ manage Ultimate even control products games XXXX. Kindred the updates time to and area our to to product, an I from and a pushing are more ago. service Mans broken across

FX in Games. additional the Boston technology We year this we building for ensure to experienced is positive are highly proactively the our and with the way. is rolls services through to later downloadable into our positive exploring site new to control, content game most of that the around rate may to ideas The new Motorsport U.S. ahead Arcade tap valuable updates, month April, of and marketing continue the recent expansion be out this release opportunities. been supporting momentum to focus benefit have of

Le believe Ultimate place actual another will visibility around sales esports in For June. of Le XX We game over increased example, Mans Le one for years. race as and hours most recent our events anticipated well for world's for be Series, watched as of future launchpad few the last of reveal the our the Mans perfect takes this Virtual the Mans opportunity the

Now like results Financial financial Stanley Interim would Chief for the our full year I invite and about to talk Beckley, Officer, the quarter XXXX. fourth to

Stanley Beckley

Thank you, evening, everyone. good Steven, and

global was Lower period license Instead, be taken any year year. in and results sale the cost the of in offering by XX.X% actions digital increase retail internal the previous of was of iRacing of for These guidance when an our a for an savings down for well primarily XX, today. has us overhead as XXXX, through our XXXX. will providing by I and forward-looking our the financial a and spend primary the from annualized As update by focus earnings increase in improvements full result headcount, X annualized to was of operating of games to the was period quarter same basis fourth $X.X quarter the reduction certain in achieved year. quarter million, $X.X the reducing and to in this sales $X.X to under on drivers million from driven expenses and savings $X on game the December the compared I million compared million highlights won't in prior overhead Revenues lower target by gain or approximately were were XXXX prior and part for with of as decrease calls, were in XXXX. to increases period company's fiscal which sales for of net our being as develop million, this revenues $X.XX in content compared June the XXXX. decrease year DLCs, to million changes of was income new a the helped offset NASCAR the related the specifically decreases same expenditures that October no cost negative in result quarter sales Net partially exceeding in Next processes. an prior end program, DLC release driven lower - The XXXX. by same to and Heat required overhead income Consequently, Gen as the This games $X.X as The additional was lower to $X in NASCAR downloadable million Car allowance by released $X.X when restructuring on XXXX. game of NASCAR released EPS year. or $X.XX

majority by workforce XXXX confirmed development ongoing the the of the primarily related approximately closure of liquidity Kingdom, of the in costs XX Australian whom the representing approximately the on in fiscal October expense workforce. constraints. company's its approximately we fourth of and $X.X and Australia based the company's announced The program, to consisting XXXX. XX% the the to announcement a workforce million the reduction, company restructuring restructuring due to the recorded year of reduction United business resulted of of XX, further company's addition are company In a severance employees, its in quarter XXXX, of and redundancy The global studio restructuring

XXXX, gain are year. loss of EBITDA income $X.X an the are in The comparative We discussed adjusted change the million as in gain EBITDA the respect the of in the of adjusted adjusted for period those to quarter. compared million in same the and prior reporting net period for of EBITDA for $X.X fourth same an improvements quarter

EBITDA for between $XX.X asset released for $X loss million XXXX of accounted revenues Net XXXX, XXXX an impairment prior lower and adjusted year year Non-cash NASCAR for and compared and to the losses for the XXXX. $X.X million their in $XX.X October from sales, to periods result for sale well digital, fiscal by mobile XXXX. EBITDA as and a license sales when of lower loss million EPS gain for For in $X.X for loss loss the was million no were net $X volumes XXXX an loss as retail of a period, $X.X the to difference respectively, million loss for XXXX. EPS $X.X due XXXX XXXX, as being portion was million for of was $XX.X year of XXXX. driven $X.XX significant to compared compared on million respective million million, Adjusted down primarily improvement games game XXXX. full the NASCAR $XX.XX of

$X.X company. the of As $XX.X Net months list a to used operations December XX key for million, be this area in for liquidity, ended the we XXXX, continues the focus was XX, to representing monthly operations approximately cash XXXX. average burn when cash an million December down monthly XX, million, of compared cash million net from the for $X.X the ended of burn average $X.X year

that company including, closing license and restructuring operations the form And cost alternatives initiatives. including, of transactions. XX, but or I of will all addition $X.X XXXX, XXXX, but additional the Strategic cash to assets the further December million potential financing licensing our sale In address or million, arrangements similar believe in to of our required fund the Stephen and which funding to as now back to, operations. and is of equivalents and recent sale decreased this for over business, and/or turn next are remarks. equity actively Thank of your had not reductions XX, in we order our which for $X.X NASCAR to insufficient limited call in for cash the of As the year to we you be several debt March options, shortfall, additional liquidity funding order not will limited to, exploring continue to time.

Stephen Hood

and Thank joining you to today, company we like away what thank today. you know If again. is you, that us Stanley, feel like those I've I'd games to a anything take to from there said

Le of I XXXX on and what a to discuss Ultimate market, forward look to know release very recent speaking further QX we're the to Mans best, this call the doing receptive about we next results. our With

Operator

now and session. the begin we you. will please, One first Thank for question. [Operator gentlemen, your Instructions] Ladies moment, question-and-answer

of from Your from first question comes Jason Canaccord Tilchen the Genuity. line

Jason Tilchen

about I'm how release. strong game, you curious marketed outpace sort else that Le appreciated. if you you plan Maybe really the well demand those talk well, you June of channels build you race little what greatly share upcoming of momentum plans One around the performed could the on a there's would Mans expectations? can in the And mentioned Congrats and sort and as how help that. maybe around about, to anything surrounding thing awareness game

Stephen Hood

to here. would Mans were XX about Le very reception We Jason, years, been a Thank I interested years many hadn't the what And question. Le it's Stephen mind for in be like it's now. bearing for think for title, as you question. good a the Mans there game

we be development we of duration we Ultimate, marketing. new and that of around new news that Endurance the surfing with Le to that which Mans. So us XXXX, the Le willingness through built ground. project the community well we understanding that's knew were going a spending a the kind to this from tallied positive kind the back sense And raw an the and around is kind we've of wave. manufacturers for the off engagement Mans pretty of there without the did And And as very World treading into existed think on of been title. coming the was throughout uptake particularly much And Championship, dime

battling incredibly space, So back in they're well, you the Porsche, like have teams doing BMW now. Ferrari Lamborghini into with coming

car more championship. money. hyper really new that of the So a surfed upswell order with We've of community the in interest most kind a this in 'XX and Motorsport big XXXX certainly through And particularly there manufacturers without direct which wave page world's to in historically, turn engaging we've in to are all taken class, spending seen with any and Games, the a of perception wasn't huge strong. in the approach we've

and well. out That with dollars the transparent to we've push to very there, open seems incredibly been and the of instead just done community. trying So spend marketing have message the

platforms consumers the and marketing Discord, also I different think very the X directly Facebook. So has pushing for communication and of has now Mans a Le shown that with but has direct engaging been this the a incredibly we we've down channels, gone extent. on been that community company consumers phase a again, social haven't with like trust And well. great typical to consumers, Games meant our delivery Motorsport And Ultimate almost of

that So to gorilla one there's pull marketing off. of been a tactics, managed and we lot

Jason Tilchen

additional in everything just cash behind follow-up, just strategy forward? if One I remarks, prepared position of potential today. some all the and now from overview. and of just helpful at release out position options with you of game changed guys liquidity laid coming but know going in really has wondering a in the wondering you the the It's stands that that, your terms where some revenue around the

Stanley Beckley

Jason, I can handle that.

scheme in X.X grand we and hasn't months been more -- us of things, look X this but relief nature. in get the out and there, to helped gotten the note to relieve more for we go don't it like for a in term XX-K. of for still alluded need and at not some the have think us the in I does mentioned, So in to our bit, need under funding. to options the that but financing XX-K, It just we our funding has released very short footnotes of that's specifically now more game out

of some cash expenses I liquidity as the in still, things, still but much So short-term count, think our we're the as on grand and managing we can. relief, scheme

had reference, in of million hand actually of And our December. XX-K, we as end For we $X.X about million. cash $X.X had disclosed in as of the in Friday,

from the it's position relates the of But to fortunes Steven has in, the as it initial like the So turned the I around doesn't alluded but don't the to, slightly, game. promise think cash company. dipped release inception completely of received

Stephen Hood

and asking that peaks very with in a I have upcoming we it's [indiscernible], Endurance do Le to if related take Mans, periods. group well, to Le thing particularly And well to in I this Mans World key Championship is calendar being the sales around expect about so marketing in the Jason, we to the with that mean of the Le Le particular, and year add June. the joint of the various release you're that we in throughout venture visibility the those the CEO, the away effort Mans. true behind as Le during can just Mans June. Mans additional And see and terms

So uptick by gain the advertising for certainly, us the Mans there's been the a awareness game, a interest Le And product, say Mans. with have has to additional joint in at I'm and visibility. we at Le ACO to have taken of the media raise the supporting surprise, pleased additional with presence and the all track, which trying great us

this will which to intend visibility, and joint some think capitalize the in So fire upon. real to we of there benefits venture, add marketing terms I which fuel are to certainly

Operator

question And line from your of Kupinski Noble next comes the Michael from Capital Markets.

Unknown Analyst

was I me an significant just I point? What located? have? head offices at -- offices. are give where reduction count wondering left you on if you the can and that of update you employee some went do and closing those know And this What's through

Stephen Hood

fast so of racing products believe speed built future. was the team entirely eventually And it's mean, and owned around with into much I Michael, racing for experiences development of Mans and Games is rallied the think we using key play that one to of needed our so that we are than Moscow, games as trying own in to and they operation as was PIC. other our concentrate great Australian INDYCAR in office you're around for we infrastructure high-quality we which we built such bolted efforts the working almost closer the delivering and they we provide our was reposition removing team. those business. concentrate that internally being could driving. of festival trying That their and the that them project, capable to also enjoyment we Studio-XXX. pick a concept which that of launch from And it. being deliver technology of own. on 'XX, experiences to could title, rather is and in a Studio-XXX springboard entirely just all them the Good refocus the this expertise Motorsport we back aware, individuals the what operations focus And as to we can, the a question. of, brought the closed projects scaling throughout trying our operations were we're that that they of back 'XX, Stephen. meant were knew and the that and built path around We us our on rFactor racing was Le just engine out takeaways which meant Russian and around driving intend well as studio. a follow other almost on communities And kind delivering This product. Throughout that's

showcase we only deliver give scale what does For no-brainer was mean to cost, is and And for us, us but Motorsport focus that think concentrate actually it to to to great Games? save of on quality I back strategy. that again, to Mans needed Le not a gains a Ultimate the great

Unknown Analyst

now are in U.K. office So is [Technical all or employees the that Difficulty] the main now? based the

Stephen Hood

say in U.K. the the after and am a to and Europe we the Europe home days, U.K., lot It's where to I U.K. these have but to my closer accent they're in split,

financial operation efforts So but are the a the supporting a we effort lot in still, and U.K. development team the still Europe. is company lot XX/X marketing in of U.S., the and though is the a of

Unknown Analyst

next element important. that of terms and develop just to kind it play of to do the that? bringing to tournament the I know your in that. is level, thinking and to plans of game and and your the community level you the Where plans really How sport think Le on how that you focus about of developing a tournaments bringing next are like of kind Mans And are are

Stephen Hood

question, to people to Michael. more make success of lot ask the A us, titles. is Great route

is it us, not. For

the experiences hand we go and launch. this activity For the to us do They racing around driving that have in hand. is Games, and at Motorsport it really building around community games

team, comfort quite of connected and a day to events daily with because very part on being their And ecosystem. racing our expects from have of activities find very, the to our being team, others. is of reasons the product funnel part that's as own funnel community. the the having why race in to activities. This today's becoming competitions, in You full driving That I'm flow we and our games rejoicing just me an racing now XXX,XXX built player talking age race the playing not will is with base subscribed hand, in building we joy in simply have technology. in other. age, tournaments this home, the over games excited hear driving that's that engage a and and the of to the already lot have the in the is solo one being community with and about platform we This to people of to And system control the of control, people means experience about experience means the the that but game online, and part

incredibly place is We've this access now, need the technology a the at called almost owned long in way in on very us own And it's early in technology. it's rFactor Le something product, already the speak only That product being released for is built an X. strong is that's previously really that based powerful. This Mans right alpha a with springboard public. of is to which a All go industry off and but because our we is to got to where we for go.

built We've the we're what know here. doing we community. So

Mans is Le people, there the but us, world's imagine professional And a coming this events who a Now place eSports racing online. to X% start Virtual the about talking we've aren't of year. we're is to Mans to for of player capitalize top sports think driver, harness contribute we that money it. and of fantasy of and not about want attract the fastest, is the being to want different in we bring community, be to That's throwing of yesterday's ways to to something done that And really the at Really, great back. one springboard news. entertainment people when esports base trying players. Le to want What out really in biggest the great, about to on typically care to have in be prize want necessarily very we could previously, be those XX% one got together and big have from people this what fun and part racing find

Unknown Analyst

probably question. answers a next this That of answer portion

company you If expect the that a profitability and map to then the towards flushed growth with an would would what be were and the would cash, move platform? benchmark what investor deliver be road from

Stephen Hood

us There's we to many have which paths to is forward, has make gone products. we that us great We're the path, think of flexible as â€˜XX, And been offering down avenues, period on I different that's to opportunities on to we've and restructuring new and quite has managed that coming different that to the people certainly, gone right exploring and many launch be come project are difficult We've set door. based are of paths, different number the a increased the where to today. particularly that different well. through for all, us opportunities but is ideas intended

advantage numbers us gone very is down We gas. right important now well. positive to the very that for think our It's off There's reception. are The really take can't around I thing Le home the Mans. foot very good. drive

as Once the things that's quality. There's now to up many we've of with service a providing content control of subscriptions around potentially terms really more are and think well. Now opportunities, quite correct we we've gaming around need product see further the got sitting But in shall have things think I'm from race doing the later? to to that buy ecosystem, We've on and we're I Without buy of things the got to one I incorporate lot is I our is past, the step and and drive it the There's running, to near-term do that shall wheel have expand. spinning need to opportunity many we on more have as utilizing that us. giving the fence mistake people home That's be we of we we in plenty just that, can adamant new front too certainly technology Le and which get we will ideas. experience, the a Mans made a solidified in I much now. excited Ultimate we're about, before in something and which that away, opportunities driving. working we or built properly

Operator

[Operator questions proceed. this are further Thank Instructions] There at Please you. time. no

Stanley Beckley

going close Operator, joining. think all I out Steve appreciate out. can for thought was But you We now. to we time. this close thank this your Okay. I

Motorsport Games (MSGM) 1 Apr 242023 Q4 Earnings call transcript